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Privatization of Firms in Rwanda: The Role of Corporate Governance Practices

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Entrepreneurship and SME Management Across Africa

Part of the book series: Frontiers in African Business Research ((FABR))

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Abstract

This chapter assesses the applicability of corporate governance practices in Rwandan privatized firms. A case study was conducted with a single cement manufacturing firm, findings from which reveal gaps in company-level corporate governance practices in matters relating to minority shareholder controls, board composition, executive reviews, disclosures, and transparency. Some of the gaps identified are related to institutional and regulatory frameworks. The findings of the study have theoretical as well practical implications for all stakeholders of corporate governance in Rwanda, that is, policymakers, corporate governance agencies, and company directors. At the firm level, there is a dire need to address the identified gaps to strengthen corporate governance best practices with regard to existing standards, while at the government level, laws could be revised to strengthen enforcing mechanisms.

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Notes

  1. 1.

    Article 20 of the Regulation (no. 07/2009 of 29/07/2009) on corporate governance requirements for insurance business, published in the Official Gazette no.35 0f 30/08/2010, available at: http://www.bnr.rw/docs/publicnotices/Insurance%20regulation%20n07%20copportate%20governance.pdf. Accessed on December 19, 2011.

  2. 2.

    Company Act (no. 07/2009), available at: www.gov.rw.

  3. 3.

    Institutions are broadly defined as the rules of the game that structure incentives in human exchange in a society (North 1990).

  4. 4.

    The cement plant is very old and has a production capacity of 100,000 tons per year, whereas modern cement plants have annual production capacities of 600,000 tons. Because of this, spare parts also cannot be easily found in the market (interview results).

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Authors and Affiliations

  1. Jönköping International Business School, Jönköping University, Jönköping, Sweden

    Samuel Mutarindwa & Jean Bosco Shema

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  1. Samuel Mutarindwa
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  2. Jean Bosco Shema
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Correspondence to Samuel Mutarindwa .

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Editors and Affiliations

  1. Jönköping International Business School, Jönköping University, Jönköping, Sweden

    Leona Achtenhagen

  2. Jönköping International Business School, Jönköping University, Jönköping, Sweden

    Ethel Brundin

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Mutarindwa, S., Shema, J.B. (2016). Privatization of Firms in Rwanda: The Role of Corporate Governance Practices. In: Achtenhagen, L., Brundin, E. (eds) Entrepreneurship and SME Management Across Africa. Frontiers in African Business Research. Springer, Singapore. https://doi.org/10.1007/978-981-10-1727-8_12

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